By Bruce Hagen
Climate change. It’s a race against time.
Chances are, you get it. You understand sustainability’s value to your planet, people and profits. Your organization is shrinking its carbon footprint, and you likely are encouraging others to follow your footsteps.
But this idea is not catching on fast enough to win the race. The earth is catching fire. The emissions and temperature curves are bending upward, causing catastrophic cascading climate costs. What else can we do?
The core problem is simple: the costs of climate change aren’t included in the price of fossil fuels. Instead, they’re paid downstream. One firm’s cheap coal power becomes another’s Superstorm Sandy.
We’re in a Failing Business
Imagine we run the Healthy Climate Company. Our sales are booming because we don’t charge for our ecosystem services. Our customers, the fossil fuel companies, appreciate the deep discounts, which they pass onto their customers and shareholders. Their sales and market share soar. The economy thrives on low energy costs. Our store thrives, but only because our shareholders – the people of the world – are donating their ecosystem without compensation.
This stops working when our shareholders run low on climate greenhouse gas capacity, triggering global warming. Their crops fail, forests burn, and homes flood. But because they don’t see the connection, or feel powerless to change it, they continue to liquidate their climate assets, while continuing to buy fossil fueled products.
A New Business Model: Charge for Carbon Emissions
Why not have the fossil fuel companies pay the climate shareholders? Impose a fuel extraction fee based on CO2 emissions. Since all our citizen-shareholders have an equal interest in the climate, all the fees are distributed to them in equal share, every month.
I’m describing an innovative form of carbon pricing called Carbon Fee and Dividend. CFD has: 1) a steadily increasing fee on the CO2 content of fossil fuels, assessed at the point of extraction; 2) returning 100% of the net fees back to households each month, paid per capita (similar to Alaska’s Permanent Fund); and 3) a border adjustment to stop business relocation.
Effective, Efficient and Equitable Carbon Pricing
CFD has several advantages over other carbon pricing mechanisms. An analysis of a Citizens’ Climate Lobby (CCL) proposal by Regional Economic Models Inc. reached a remarkable conclusion: it will reduce CO2 emissions to less than half of 1990 levels while adding a net 2.6 million new jobs… in 20 years! The economic bonus comes from every American household getting a three-figure monthly dividend payment. Because carbon footprint closely tracks household income, lower and middle income households come out ahead. The steady and predictable increase in the relative cost of fossil-fueled products shifts consumer spending, business investment, and venture capital toward clean energy and efficiency.
Simple and transparent, CFD would create a reliable price signal. No Congress would repeal a law that makes monthly payments to one hundred million constituents. And the CCL proposal is revenue-neutral. It doesn’t grow government, pick technology winners, or require EPA regulation, critical requirements for conservatives’ support. Finally, the border adjustment incents our trading partners to adopt comparable carbon pricing mechanisms (to avoid paying import duties), making it a global solution.
Changing the Political Climate
“That’s a brilliant idea”, you say, “but wouldn’t it take an act of Congress?” Precisely. And without broad business support, a CFD bill’s lifespan would be shorter than that of a snowball in a smokestack.
This is why CCL focuses on enabling businesses to engage in effective climate advocacy. In Florida, we organized dozens of business and community leaders worried about rising sea levels. The result: the Gibson Resolution: fourteen (and counting) House Republicans who acknowledge climate change and commit to finding solutions. We supported formation of the House Bi-Partisan Climate Solutions Caucus. To participate, you must bring someone from across the aisle. Sixteen have joined so far.
Citizens’ Climate Lobby is non-partisan. We believe in respect for all viewpoints, even for those who oppose us. We will help you with a strategy that works best for your company. We are now collaborating with American Sustainable Business Council, Partnership for Responsible Growth and Future 500 to convene a major business lobbying event in Washington DC next spring.
The Race of the Climate Changes
The climate is spiraling away from safety. But the political climate is changing, too, faster than anyone thought possible. Contact me or CCL’s Business Climate Leaders project if you want to help win the race, for everything that you love.
Petaluma, California resident Bruce Hagen writes this as a co-chair of the Citizens’ Climate Lobby Sonoma County Chapter. Bruce Hagen’s energy and environment activism roots go back to Earth Day 1. Along the way, they touch the California Coastal Commission and Nuclear Safeguards initiatives; energy legislative analysis in the US Senate for the first federal solar tax credits; and both the early and recent days of PG&E’s energy efficiency program. He’s written nearly 250 newspaper columns for the Petaluma Argus Courier on building sustainable community. For the past 3 years Bruce has worked for Enphase Energy, a high-tech solar energy firm in Petaluma. He completed a REV Sustainability Circle in May of this year.